196 N.E. 153 | Ind. Ct. App. | 1935
This was an action by a complaint in one paragraph to recover damages for breach of a statutory bond executed by appellees in favor of the building and loan company. The specific charge was that Wiley, while secretary-treasurer of the building and loan company, purchased certain debentures of the General Theatre Equipment, Inc., without authority of the *439 board of directors as alleged to have been necessary as per the by-laws.
The appellees pleaded a general denial and estoppel by reason of the fact that the acts of Wiley had been approved by subsequent ratification and acceptance of benefits thereunder.
The court, upon proper request, found the facts specially and rendered conclusions of law thereon, first, that the law is with the defendants and that plaintiff is not entitled to recover, and second, that defendants are entitled to recover costs. This appeal is perfected upon an assignment of error that the court erred in its first and second conclusions of law.
The finding of facts necessary to a decision of this case were as follows: that the loan company was organized under the Rural Saving and Loan Act; that the stockholders held a meeting before incorporation and discussed and agreed upon and adopted by-laws, among which was: "Section XXXIII. Should there, at any time, be money in the treasury, not called for by borrowing or withdrawing members, the Board of Directors, on recommendation of the Finance Committee, may loan or invest the same upon such rates, terms and securities as the Board may from time to time prescribe." That the board of directors' minutes of a meeting contained the following: "Minutes of meetings of March 27, April 17 and April 19, were read and upon motion of Ben Larrimer, seconded by Harry Goldthwaite and carried same were approved." That the meeting on March 27 was adjourned until April 1 and concluded on that day. That there was no finance committee appointed from March 7, 1927, to December 31, 1930; that Wiley was the duly elected, qualified, and acting secretary from October, 1925, to June 1, 1931, and sometimes during that period the treasurer; that he gave the bond in question; that such bond was an official *440 bond required by statute; that Wiley, as secretary, on March 7, 1927, invested $5,000.00 without the prior order of the board of directors and from time to time thereafter invested other funds; that on May 8, 1930, after consulting with the president of the loan company and obtaining his consent and approval, he invested $3994.67 of the funds of the corporation in General Theatre Equipment, Inc. 6% convertible debenture bonds of the par value of $4,000.00. That in October, 1930, the General Theatre Equipment, Inc. paid to the loan company the sum of $120.00 as the semi-annual interest on said bonds and again in April, 1931, paid a like amount for the same purpose; that these amounts were credited into the earnings of the loan company. Finding of fact number 8 discloses: "That the board of directors of said corporation had knowledge of all of said investments, and of the collection of all interest items thereon, including the interest on said General Theatre Equipment, Inc. bonds, and never made any objection thereto or criticism thereof, but at all times, until December 31, 1930, acquiesced therein." That this purchase was made without a prior order thereof made of record by the board of directors.
The statute provides that the power to make and amend the by-laws shall be in the board of directors. § 5131, Burns 1926, § 18-2806, Burns 1933, § 8112, Baldwin's 1934. Where the 1, 2. stockholders proposed certain by-laws, as shown by the findings of fact, and the board of directors approved their acts, it means that the board of directors adopted the by-laws as proposed by the stockholders. Since the board of directors have power to adopt the by-laws they, of necessity, have the power to waive the by-laws unless this right is restricted by statute. 8 Fletcher Ency. Corp. § 4200 page 771;Farmers State Bank v. Haun (1923),
This court has said in at least two cases that acts of this kind may be ratified. In National Life Ins. Co. v. Headrich,supra, the court said (p. 58): "Ratification means the adoption of that which was done for and in the name of another without authority. It is in the nature of a cure for lack of authorization. When ratification takes place the act stands as an authorized one and makes the whole act, transaction, or contract good from the beginning. Ratification is a question of fact and ordinarily may be inferred from the conduct of the parties. The acts, words, silence, dealings, and knowledge of the principal as well as many other facts and circumstances may be shown as evidence tending to warrant the inference or finding of the ultimate fact of ratification. 1 Mechem, Agency, Secs. 347, 349, 430, 434; Indiana Union Traction Co. v. Scribner (1910),
In Bossart v. Geis (1914),
Finding no reversible error the judgment of the Huntington Circuit Court is affirmed.